The Colombian government has made progress in resolving conflict with armed groups, but it has not ended illegal mining. The dynamic between illicit groups and mining may be changing, but it is not disappearing; as such, the persistence of illegal mining will continue to dampen state finances through untaxed revenue and it will remain an obstacle to investment.
At a time of growing isolationist political thinking in the West, enterprises and investors should capitalise on the opportunities offered by China’s OBOR.
King Salman’s one month tour of Asia produced several bilateral agreements of note between Saudi and China, particularly in the energy sector. However, the intentions of these may be more-deep rooted.
In March 2016, Zimbabwe announced its decision to rigorously impose its indigenisation law; news that sent shockwaves through the Chinese investment community.
In Colombia it is estimated that corruption costs the country $4.2 billion per annum; with bribery so pervasive, it is viewed as a business formality. The ‘contract carousel’ and PetroTiger scandals are examples of the inefficiencies in the current legislation, as well as the endemic issue of collusion between the public and private sectors.
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This assessment considers some of the contemporary operational obstacles to the growth of foreign investment in Mexico, and suggests some ways in which they could be overcome.
The Colombian government’s majority stake in electricity provider Isagen, was abruptly sold to Canadian investment fund Brookfield Asset Management on 12 January 2016. Although Santos had long defended the move for plugging the fiscal gap and improving investment conditions, influential congressmen have joined the general public in reacting with outrage, calling it one of the greatest public losses in recent history.
Mexico’s corruption problem is a vicious circle. Few legal tools have existed to identify, punish and prevent actions such as graft, conflict of interest or influence peddling. Powerful corrupt officials have no incentive to fill that legal void, and so the cycle of failed promises and public losses has continued for decades. But does social media promise to break this cycle?
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Agriculture is playing an important role in keeping Mexico’s net foreign trade deficit to a minimum. The key question remains; how much is already being done to capitalise on agricultural potential, and should investors be confident enough to put their money into Mexican coffee, fruit, vegetables or meat exports?
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Despite impressive gains in the peace negotiations, the government and the FARC will struggle to meet the 23rd March 2016 deadline set by President Santos. When a deal is eventually signed, Colombia will not have achieved a uniform ‘national peace’. In fact, short term levels of violence will likely spike in the immediate aftermath, primarily because FARC elites will face obstacles in channelling the terms of any negotiation to the sub-factions that operate in isolated rural areas.
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The Colombian government is close to a final peace deal with the Revolutionary Armed Forces of Colombia (FARC). Many commentators believe that a final peace accord will fuel investor confidence in Colombia as a potential economic ‘powerhouse’ in Latin America. However, the country’s volatile and intricate criminal underworld may be about to experience another transformation that could further complicate the ability of foreign companies to safely navigate certain sectors.